AFP - The Austrian government will take control of struggling Volksbank (OeVAG), injecting funds into the lender raised by a levy on the banks, the finance ministry said Monday.

Volksbank said in a statement that the rescue plan was adopted by the finance ministry after talks with its owners -- the OeVAG group, Austria's Raffeisen bank, and Germany's DZ bank and insurer.

It said the rescue would stabilise the bank after an injection of 480 million euros ($640 million) in all, with the government providing some 250 million euros of the amount.

OeVAG, which expects a loss of 1.2 billion euros for 2011, already had to be bailed out in 2009 at the height of the global financial crisis.

The finance ministry said the government expected to raise funds for the bailout from the banking sector and it would end up holding between 40 and 49 percent of the lender afterwards.

Austria's banking sector has suffered in the eurozone debt crisis because of its heavy exposure to the stalling economies of Eastern Europe.

Last month, Standard and Poor's cut its top AAA rating on Austria by one notch to AA+.